WEEKLY MARKET REPORT

Week Ending 21^st September, 2012

Northern Micron Indices Comparison: Source of information: AWEX

SHORT AND SWEET

The market’s day in sun was unfortunately that, about 1 day!  The wobbles that the medium microns had last Thursday continued this week. Both days recorded losses (albeit minor ones) but still a disappointing result as last week gave us hope that the market may have turned positive for the time being.

With no sales on Wooltrade and the bad result on Wooltrade Plus (the live internet based auction) on Tuesday our suspicions for the market to lose ground were confirmed on Wednesday as the market eased up to 15 cents for the middle microns. Thursday saw the market ease a touch, but still hard to take.  By week’s end 19.5 to 23s lost 10 to 25 cents while 17.5 and finer and 18.5 to 19 recorded single digit falls - the superfine and fine types benefited from the stylish catalogues from Tasmania and New Zealand being offered in Melbourne. The EMI fell by 12 cents to 946. The 42,000 bale national catalogue was the largest in six weeks with 8.4% being re-offered, trying to capture better prices, but the softer market sending the passed-in rate above 10%.

It did seem a little premature last week to call those rises a recovery. The bulk of the spring offering is still being shorn and historically mid September is too early for the sustained upward trend. We are of the belief that small gains like last week should be grabbed with both hands either with wool sales at auction or on Wooltrade, or for those who haven’t shorn; it was a good opportunity to lock in a forward price. For example, 21 microns last week traded at 1140 for November, this week they are back under 1100 cents.

In the skirting catalogue this week we struggled to find a weakness and felt all sections were at least on par with last week. The crossbred section was, if anything was a touch dearer and competition was solid throughout.

Some interesting reading can be had comparing this season with last. The EMI is 23% lower, the AU$ is 3.7% higher and the offering YTD is 14% lower or almost 60,000 bales less than the same week last year. This is the figure that buyers will be looking at and if they also look at the AWTA data on wool tested they will see only a 2% fall in bales tested. So the difference is in wool held, which we are can attest to. This time last year we had almost nothing on hold whereas today we are currently holding a moderate amount.

Next week we will offer 1167 bales first up on Wednesday with a smaller offering of 37,109 bales being offered in Syd/Melb/Fre and a similar trend expected.

                Eastern Market Indicators (AUD cents/kg clean)                    AUD/USD Currency Exchange

                Eastern 946 cents ê 12 cents compared with 13/09/12                                      1.0390 ê 0.0090 compared with 13/09/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 965 cents ê 9 cents compared with 13/09/12